We are an expat couple (< 30 years old) currently living in Germany. We are wondering about the long term benefits of investing in real estate when we do not have a plan to have children of our own or adopt and we do not have any nieces/nephews and hence no heir for our savings/property. We work in unionised electro industry (IG Metall) and hence our pay is guaranteed to increase around 3 to 4.5 percent every year. House loans being less than 2 percent currently, it seems like a good idea to invest in a place of our own. We already have both a Riesterkonto and a Betriebliche Altersvorsorge (both are private pension plans with tax benefits) in addition to the mandatory govt. pension. We do not have any interest to invest in stocks or capital gains. And we haven't found any other safe deposit scheme which provides sufficient interest for our extra savings. Hence we are looking at real estate as an option.
- Place of our own. And probably we make profit if we sell at the right time in our retirement.
- Possible extra income if we rent the unused parts of the house.
- Less flexibility to move jobs or to migrate to a different country. We are still considering Switzerland as a possible option after 10 years. But we could very well commute as we are based in south Baden region.
- We do not have any experience with maintenance works. We have never done anything on our own including trivial stuff such as painting a wall or replacing a car wiper till we reached Germany. Owning a home seems like more responsibility than simply renting one. Also a higher maintenance costs compared to a rented home.
- We do not have any heir and hence all this effort may seem wasteful in case we are unable to make a profit when we sell the house (or worse if we have to sell for a loss) when moving to a retirement home.
Please provide your opinions if this analysis makes sense to you or you could suggest an alternative investment plans better suited to our scenario.
Edit: I added the part about heir as I always believed your first home to be not just for you, but something you leave for your children to support them financially. Without a heir, I was just wondering if my investments are better off in something else like stocks instead (yes, am reconsidering this option now). I would rather have 100000 in cash than a property worth 120k, but maybe not if its 80k vs 120k property.